What's the difference between Israeli citizenship and Jewish nationality?

Well I know a person can be a citizen of Israel and that internationally that means that a person has Israeli nationality but Israel distinguishes between citizenship and nationality.  Here's a Ha'aretz article on a man who believes he might be stripped of his "Jewish nationality" because of an interview he gave to the paper.

An Israeli citizen may have his classification as "Jewish" withdrawn by the Interior Ministry in the wake of a newspaper interview he gave. In an interview for the Family Affair section of Haaretz Magazine, in May, Itai Bar, a resident of Kibbutz Shoval in the south of the country, disclosed he wasn't Jewish.

Bar, 35, was asked by journalists Avner and Reli Abrahami to recount his family story for their weekly column. Bar's father, a Catholic, arrived at the kibbutz as a volunteer after the Six-Day War, where he met Bar's mother, the daughter of a Catholic mother and a Holocaust survivor father. Bar was born in Shoval and Hebrew is his native language. He mentioned in the interview that he is mistakenly described as Jewish in his ID card, but still serves as a "Shabbes goy" at the kibbutz dairy.

Three days ago, Bar arrived at the population registrar office in Be'er Sheva to obtain a document he needed. To his surprise, the clerk there told him his case was "blocked." He said that there was an alert about my nationality, following a report. I asked who reported it, and she said she couldn't tell me, but it might have something to do with the Haaretz article. From her I went to another clerk, who started asking me about my grandparents. I told her she was infringing upon my civil rights."

Later on, Bar found himself arguing with the deputy director of the office about his Jewishness. "She asked me if I was Jewish, and I said yes, I was circumcised and I celebrate the Jewish holidays."

The deputy director subsequently unlocked Bar's file to allow him to receive the document he came for, but warned him that his case was being forwarded to the Interior Ministry office in Jerusalem. When he pressed for the source of the information, he was told it came from the spokeswoman of the Interior Ministry.

The spokeswoman, Sabine Haddad, strongly denied yesterday she was the source of the information, and stressed that the process would not alter Bar's legal status in Israel.

She said that the spokesperson's office was charged with responding to media queries and preparing press clippings, not investigating people's Jewishness.

 So if it doesn't "alter Bar's legal status in Israel" what's it all about?